Tag: debt ceiling

In the War Against Taxes, Your Neighbor Is Not Your Enemy

by David Bruce

Source: Adbusters

Ever-embroiled in debate, members of Congress are now in dispute over how to avoid financial default.  Most of us who live in the United States and work for a living to support ourselves and our families have some idea how to balance our budget and how to avoid financial distress.  Our elected representatives, however, show little sign of fiscal competence or moral demeanor, as they publicly and shamelessly deliberate on the best approach for avoiding a situation that will largely affect the elderly and disabled citizens of our country.  Additionally, should our government default, we more-than-likely would endure increased interest rates, and government employees would suffer delays in pay.  Regardless of income-level, individual taxpayers would be adversely affected.  Conversely, our government and largest corporations would continue operating in such a way that they would benefit to some degree, regardless of the political or economic fallout.

Should our government default, a worst-case scenario illustrates that government employees (including service members) and social security recipients would sacrifice timely receipt of their paychecks.  Major corporations would make attempts to recoup any losses by raising interest rates on credit cards, mortgages, and other loans.  Would these large businesses be deprived of anything?  Indeed, the ledgers may initially reflect a less-than-profitable quarter: nothing that a government bailout wouldn’t resolve.  The American public does not merit a bailout, though, even with an election on the horizon.  The major corporations are the darlings of both Democratic and Republican parties.

A list of ten companies was recently compiled that illustrates the overbearing tax burden suffered by large businesses in America.  Of course, the buzz about the earnings and refunds for General Electric has made headlines across the Internet.  Also worth mentioning, however, is the recent tax refund of $1.9 billion that Bank of America received in addition to their $4.4 billion in profit.  This is also a company that profited from the aforementioned bailout.  In 2008 Goldman Sachs paid income taxes measuring 1.1 percent of its income.  In 2010 Citigroup paid no federal income tax, yet they generated in excess of $4 billion dollars of income (let us not overlook the bailout monies).  In 2009 Exxon Mobile paid no income taxes against profits of $19 billion.  Additional evidence is easy to access.

The families surviving on wages that are considered to be poverty-level and not paying federal income tax are not the criminals.  The well-to-do families who have benefited from hard work, raising their standard of living significantly are not the criminals.  Yet these two demographics are pitted against one another, tools in the political mêlée waged by each and every one of our elected representatives.  Individual American taxpayers in the lowest 20% tax bracket and individual American taxpayers in the highest 20% tax bracket are positioned as bitter rivals in this Congressional conflict.  The poorest Americans pay little or no federal taxes, and the wealthiest Americans pay the largest percentage.  While the former would most likely switch places with the latter without argument or hesitation, and while the latter certainly has a valid argument against further tax increases against money that have rightfully earned, the fact remains that the real criminals are on Wall Street and Capital Hill.

An article in the Tucson Citizen pointed out that in 2010 individual income tax accounted for 42% of total revenue, while corporate income tax accounted for a mere 9% of total revenue. From outward appearances, this is what and who our representatives are fighting for.   In a Christian Science Monitor article, calculations demonstrate that tax breaks are worth about $1,000 to a typical family earning about $21,000 or less, augmenting their after-tax income by 9 percent. Middle income families earning between $40,000 and $70,000 receive an average of about $4,000, increasing their after-tax incomes by about 8 percent.  For those in the top 1 percent, tax breaks allow those wage-earners to increase their after-tax incomes by more than 20 percent.  According to this research, the highest-income 20 percent enjoy almost two-thirds of the benefits of tax expenditures. More than one-quarter of tax breaks are allotted to the top 1 percent alone.

The issue is not whether or not taxes should be raised or for whom taxes should be raised.  The issue is the major loopholes that exist permitting major companies to bring their tax liability to a percentage lower than that of the average working American.  The issue is our elected representatives who represent the interests of these companies and their own self-interests.  These issues will not resolve themselves.  The majority of our representatives do not care about us as people.  They do not care how we live, if we live, or how we die.  They want our vote.  They have taken virtually everything else from us; do not give them a vote they have not earned.

Your enemy is not your neighbor.

Fiscal Responsibility – A Lost Art

by Shadra Bruce

debt-1376061_1280When Dave’s corporate job was lost through downsizing and reorganization in 2004, we decided together that corporate America wasn’t the right fit for him. When my “atrocious boss” (as our kids like to call him) threatened to fire me for using my own earned sick leave to care for our ill children in 2007, I joined my husband in corporate refugee status. We’ve never been happier.

We both went back to school, earned degrees, and made plans for a new future.  Dave was going to teach and I was going to start my own freelance writing business. Dave is now certified to teach and substitute teaches for the local school because there are no full-time teaching jobs. I am successfully building a small writing, editing, and social media consulting business, and our two incomes adequately support us.

We do, however, live frugally by choice and by circumstance. When there’s money to spare because I’ve had a good month, we first pay off a little more of our debt. If there’s still some left, we travel, spoil our kids, or sneak in a date night. When money is tight, we don’t get to write a new rule that says we can increase our debt limit, nor do we write bad checks that the bank has to cash. Like most American families, we simply tighten the belt and do without.

Our federal government could take a few lessons on survival in the real world, from this example and that of thousands of other Americans who have made similar strides and sacrifices. You see, when others talk about “tightening up the budget,” they suggest things like “only get your hair done every 8 weeks instead of every six and you’ll save $500 a year” or “Take a brown bag lunch to work twice a week instead of eating out and save $800 a year.”

We already live more frugally than that, as do many families. When someone needs a hair cut in our household, they climb up on a stool in the kitchen, and I take care of it. We don’t eat out even once a week, let alone daily, as is the custom for many elected officials. It is possible to live with one vehicle or no vehicle at all, and if we can walk to the store or post office instead of drive to it, we should.  Many Americans live without the perks that are afforded to those people we have elected to govern and enforce our laws.  Our government, of course, doesn’t run that way.   Now if we don’t raise the debt ceiling, who will be hurt? The aged and disabled people who will not get their Social Security checks, mostly.

But this isn’t about raising the debt ceiling; it’s about stopping the special interests and corporations that have transformed Congress into personal bankers.  In the short term, we’re going to have to raise the debt ceiling or face even worse economic trauma. But in the long-term, America (at the individual level and the national level) needs to learn not just to live within a budget but to prioritize things other than their own special interests.